On the design of the architecture of Distribution Level Flexibility Markets

Abstract

Distribution Level Flexibility Markets (DLFMs) constitute a timely development towards facilitating bottom-up RES and flexibility investments as well as instantiating a fair and regulated interaction framework among energy sector stakeholders, namely System Operators (DSO, TSO), aggregators, Flexibility Service Providers (FSPs), the recently introduced actor called Flexibility Market Operator (FMO) that operates the DLFM and the end energy prosumers. Moreover, the interaction of DLFMs with existing Transmission Level markets and with distributed energy resources is of special interest. In this paper, we present and analyze three possible ways to integrate DLFMs in today’s regulatory framework, each corresponding to a different market architecture, and we evaluate their implications. A comparative analysis reveals the strengths and drawbacks of each one of them both from a system’s as well as from each individual stakeholder’s perspective. The effects of different distributed RES and flexibility penetration levels are also analyzed through a sensitivity analysis. The comparison of the proposed DLFM architectures, both with each other and the current electricity market paradigm, testifies the necessity and the importance of DLFMs and quantifies the impact that they have in: (i) reducing distribution grid management costs, (ii) guaranteeing distribution service quality, and (iii) increasing the penetration of bottom up RES/flexibility investments.